8-K

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

         Date of Report (Date of Earliest Event Reported): May 11, 2005

                                -----------------

                             Digital Recorders, Inc.
             (Exact Name of Registrant as Specified in Its Charter)



        North Carolina                      1-13408               56-1362926
(State or Other Jurisdiction of    (Commission File Number)     (IRS Employer
        Incorporation)                                       Identification No.)


                5949 Sherry Lane, Suite 1050, Dallas, Texas 75225
               (Address of Principal Executive Offices) (Zip Code)

        Registrant's Telephone Number, Including Area Code (214) 378-8992



ITEM 7.01.  Regulation FD Disclosure

On May 11, 2005, Digital Recorders, Inc. announced that it has entered into a
distribution agreement with Verint Systems Inc. (NASDAQ: VRNT), based in
Melville, N.Y., a leading provider of actionable intelligence solutions, to
introduce new security-related products and services within the DRI's core
intelligent transportation system (ITS) market.

A copy of the Company's press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference. This Form 8-K and the attached exhibit are
furnished to, but not filed with, the Securities and Exchange Commission.

ITEM 9.01.        Financial Statements and Exhibits

(a)  Exhibits.
     99.1     Press release dated May 11, 2005.







Signature(s)

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                               DIGITAL RECORDERS, INC.

Date: May 11 2005                              By:    /s/ DAVID N. PILOTTE
                                                      --------------------
                                                      David N. Pilotte
                                                      Chief Financial Officer





INDEX TO EXHIBITS

EXHIBIT
NUMBER   DESCRIPTION
- -------  -----------
   99.1  Press release dated May 11, 2005.

EX-99.1

                                                                    Exhibit 99.1

Digital Recorders, Inc. Announces Distribution Agreement with Verint Systems
Inc. to Provide Co-Branded Audio/Video Surveillance Solutions for Transit
Industry

    DALLAS--(BUSINESS WIRE)--May 11, 2005--Digital Recorders, Inc. (DRI)
(NASDAQ: TBUS), a market leader in transit, transportation, and law
enforcement digital communications and audio enhancement systems,
announced today that it has entered into a distribution agreement with
Verint Systems Inc. (NASDAQ: VRNT), based in Melville, N.Y., a leading
provider of actionable intelligence solutions, to introduce new
security-related products and services within DRI's core intelligent
transportation system (ITS) market.
    Through the distribution agreement, which remains effective until
the parties elect termination, the Company's on-vehicle information
capture, processing, and storage technologies will be joined with
Verint Systems Inc.'s off-vehicle surveillance technologies to produce
co-branded products offering a unique approach to security risk
mitigation for operators of surface transportation systems. The
resulting new security-related products will include on-vehicle video
surveillance interfaces with DRI's global positioning, satellite-based
automatic vehicle locating (AVL) and automatic vehicle monitoring
(AVM) products.
    "We are excited to be rolling-out this increased focus on the
security risk mitigation aspect of our established ITS business.
Although we do not expect significant revenue or operating profit
implications in fiscal year 2005, we plan to build the foundation to
generate profitable revenue in fiscal year 2006 and beyond," David L.
Turney, the Company's Chairman, Chief Executive Officer, and
President, said.
    According to Mr. Turney, working with an organization such as
Verint Systems Inc. to deliver a co-branded, unique product is
fundamental to DRI's long-term strategies and goals. "In our opinion,
Verint Systems Inc. has leading-edge capabilities in video
surveillance, including capture, analysis, storage, retrieval, and
facilitation of appropriate action when threats are detected. Their
emphasis is predominately off-vehicle. DRI's strengths are in capture,
presentation, processing, and storage of information on-board the
vehicle and delivery of that information to processing capability in
actionable form. This combination of strengths should place the
DRI-Verint Systems Inc. team in a strong position to assist surface
transportation customers in mitigation of security risks."
    Mr. Turney said security risk mitigation is becoming increasingly
important for operators of transportation systems. "With the
ever-present threat of terrorist activities around the globe, I would
list among the transit industry's top concerns in the context of
security: (1) the need for timely detection of security threats; (2)
the need for enabling prompt and appropriate response by transit
operators and law enforcement personnel; and (3) the need for
pro-active measures that will help us thwart terrorist actions. DRI is
dedicated to addressing these concerns as they apply to our core ITS
business and to providing solutions through our products and
services."
    "DRI's business is rooted in the established ITS market. DRI
already has established products and markets, and growing revenue. Our
ITS business virtually has always had a security risk mitigation
benefit. Now we are significantly expanding that benefit," Mr. Turney
added.

    ABOUT VERINT SYSTEMS INC.

    Verint Systems Inc., headquartered in Melville, New York, is a
leading provider of analytic software-based solutions for
communications interception, networked video security and business
intelligence. Verint software, which is used by over 1,000
organizations in over 50 countries worldwide, generates actionable
intelligence through the collection, retention and analysis of voice,
fax, video, email, Internet and data transmissions from multiple
communications networks. Verint is a subsidiary of Comverse
Technology, Inc. (NASDAQ: CMVT). For more information, go to
www.verint.com.

    ABOUT THE COMPANY

    Digital Recorders, Inc. is a market leader in transit,
transportation and law enforcement or security digital communications
and audio enhancement systems using proprietary software applications.
Our products improve the flow and mobility of people through
transportation infrastructure, mitigate security threats, and enhance
law enforcement agencies' surveillance capabilities. Our transit
communications products - TwinVision(R) and Mobitec(R) route
destination signage systems, Talking Bus(R) voice announcement
systems, Internet-based passenger information systems, and computer
aided dispatch/ automatic vehicle locating and monitoring systems -
enhance public transportation and mitigate security threats worldwide.
Our electronic surveillance tools, including microphone amplifiers and
processors, countermeasures devices, speech activity detectors, and
radio/television noise cancellers, help law-enforcement agencies
around the globe detect, capture, arrest and prosecute criminals. For
more information about DRI and its operations worldwide, go to
www.digrec.com.

    FORWARD-LOOKING STATEMENTS

    Statements regarding DRI's distribution agreement with Verint
Systems Inc., future security-related product development and sales,
as well as other statements that are not historical facts are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements rely on a number of assumptions concerning future events
and are subject to a number or risks and uncertainties that could
cause actual results to differ from those contained in the
forward-looking statements. These include, but are not limited to,
uncertainties surrounding DRI's anticipated benefits of a joint
agreement with Verint Systems Inc., any future development and sale of
products and services, risks and uncertainties related to general
economic conditions, product demand and market acceptance risks, and
the results of implementing the Company's business plan. Refer to the
Company's various Securities and Exchange Commission filings, such as
its Forms 10-Q and 10-K, for further information about forward-looking
statements and risks associated with the Company's business.

    CONTACT: Digital Recorders, Inc.
             Veronica B. Marks, 214-378-4776
             Fax: 214-378-8437
             E-Mail: veronicam@digrec.com